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Fujifilm sharpening focus on biologics contract manufacturing

Plans to more than double culture tank capacity by 2019

Fujifilm's facility in the U.S. state of North Carolina.

TOKYO -- Fujifilm Holdings plans to expand its biopharmaceutical contract manufacturer business by more than doubling the capacity of its culture tanks by 2019 and hiring more engineers to manage its production operations to provide manufacturing services to the pharmaceutical industry.

By adding capacity and taking on more work, Fujifilm aims to more-than triple the fiscal 2016 revenues of its contract manufacturing business to 100 billion yen in fiscal 2023.

Although the Japanese company is busy developing new drugs of its own, it wants to secure a stable source of revenues in the meantime.

The pharmaceutical industry is keenly interested in biopharmaceuticals because they tend to work more directly than conventional medicines. However, they require the culturing of cells and microorganisms, making them more technically difficult to manufacture. The demanding procedures do not necessarily play to the strengths of traditional pharmaceutical companies, creating new business opportunities for contract manufacturers.

The pharmaceutical industry is evolving into the kind of horizontal business model deeply rooted in the electronics industry, where products like smartphones are made through a collaboration of many companies all playing to their separate strengths.

Fujifilm became involved with biologics contract manufacturing after acquiring the biopharmaceuticals business of U.S. drug giant Merck in 2011. It currently operates contract services at sites in the U.S. states of North Carolina and Texas, and in the UK. These three biologics plants have culture tanks with a combined capacity of 26,000 liters used for manufacturing a variety of active pharmaceutical ingredients, including proteins for a vaccine for prostate cancer.

Fujifilm is already investing in added capacity at its Texas base, but now plans to spend an additional 3 billion yen ($2.6 million) for three more culture tanks that will become operational in 2019. On top of that, it plans to lease equipment starting in 2018 from a plant in Ireland owned by Merck. Through these two actions, Fujifilm's culture tank capacity will increase 2.2 fold to 58,000 liters in 2019. The company will also hire some 100 more engineers in 2017, bringing to approximately 1,300 the workforce tasked with managing the biopharmaceuticals manufacturing process.

The global market for biologicals was worth an estimated $202 billion in 2016, and will grow to reach $326 billion in 2022, according to the British market research company EvaluatePharma.

That growth represents a huge opportunity for contract manufacturers.

Fujifilm's Japanese rivals include not only Toyobo and Mitsubishi Gas Chemical, but also Asahi Glass, which became involved in biologics contract manufacturing in February when it acquired a Danish company for some 60 billion yen. Global leader Lonza Group of Switzerland has over 300,000 liters of culture tank capacity, and Samsung Electronics group company Samsung BioLogics of South Korea is aggressively investing in equipment and could eclipse Lonza's capacity soon.


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